Beneficiary of a Bank Account

Beneficiaries of an Estate Can Help the Estate Planning

A good estate plan requires the selection of beneficiaries and contingent beneficiaries. The selection of beneficiaries will usually reflect a person's desires and most often will be a person's spouse, children and other close relatives or friends.  Charities and other not-for-profit organizations may also be named as beneficiaries in a last will or Trust. Naming the beneficiaries of an estate is an important aspect of estate planning.

Once a person has passed away the beneficiaries of an estate will be either those named in the Will or the persons entitled to inherit under the statutes relating to intestacy.

Additionally, beneficiaries can be named on particular assets.  For example, a person may have a bank account that is owned in his own name alone.  Upon the person's death this account is subject to the provisions of a Last Will. However, if a beneficiary of a bank account is named, the account passes to the named beneficiary upon death.  These types of accounts have been known as totten trusts or as "FBO" accounts which means "for the benefit of".  Another type of account ownership is a joint bank account where the joint owners have a right of ownership.  Upon the death of one owner, the account is owned in its entirety by the survivor.

When creating an estate plan it is important to know who you want to benefit from your asset distributions.  It is also imperative that a person know and understand their beneficiary designations so that their Will provisions and asset designations work in harmony to carry out their intentions.

Another consideration regarding beneficiaries can relate to various business agreements.  For example, if the decedent owned a business, he may be the owner of shares of stock if the business was a corporation.  Ordinarily, a decedent's interest in stock held in his name would pass to his beneficiaries under his Will.  However, the business may be subject to agreements such as a shareholder agreement that requires that the stock be given to the company and that the company would pay a specified sum of money to a named beneficiary. Sometimes this payment is in the form of life insurance proceeds payable to a designated beneficiary.

Additionally, the selection of a beneficiary and the manner in which the beneficial interest is transferred may be influenced by the tax laws.  For example, assets given to a spouse or a charity may provide an estate tax deduction.

The estate tax marital deductions allows all assets passing to a surviving spouse to be free of any estate tax.  The unlimited marital deduction is available for Federal estate tax and also New York estate tax.  Also, on the Federal level a concept known as "portability"  allows a surviving spouse to obtain and use the portion of the estate tax credit exclusion that was unused by a pre-deceased spouse.

I have many years of experience working with and advising clients in the creation and implementation of plans that effectively express the clients’ personal desires regarding the disposition and protection of assets while providing potential tax advantages and security for family and beneficiaries.  I have also represented many beneficiaries of an estate.

I graduated in the top 10% of my class at New England School of Law in Boston and served on the prestigious “Law Review.”

Contact me directly at (212) 355-2575 or by e-mail